The Price of Failure
How much has the collapse of Somalia cost the world? $55 billion -- and here's where it went.
On the morning of Oct. 4, a truck bomb exploded on a well-trafficked street outside the Ministry of Education in the Somali capital of Mogadishu, killing upwards of 80 bystanders, many of them university students. The attack brought an end to the relative lull that had held in Mogadishu since August, when fighters for the al-Shabab guerrilla forces withdrew from the city, and offered a stark reminder that the world’s most notorious failed state remains just that.
Somalia’s ruin can’t simply be chalked up as a case of Western neglect. For decades, the United States and international organizations have poured money into Somalia despite its relative geopolitical insignificance — first as a Cold War bulwark, then as a humanitarian emergency, and now as an effort to contain crime and terrorism. Just how much has Somalia cost us? To figure out the true financial burden that Somalia’s conflict has imposed on the world since 1991, we used a variety of official and unofficial sources, combined with some educated guesswork, and came up with an estimate of $55 billion. That figure includes everything from aid supplied by the Red Cross and defaulted World Bank loans to naval patrols off Somalia’s piracy-plagued coast and CIA-run detention facilities within the country.
$55 billion may be modest in comparison with the cost of the interventions in Iraq and Afghanistan — which together are likely to end up costing the United States more than $1 trillion, according to the Congressional Budget Office — but what’s remarkable is how little we have to show for it. For all the treasure expended there, Somalia is no closer to stability than it has been at earlier points in its two-plus decades of chaos. The country is currently experiencing the worst famine the world has seen in two decades, with more than three-quarters of a million people at grave risk of starvation, and remains riven by civil conflict, piracy, and extremism.
The world’s approach to Somalia has long been trapped in an unhappy middle: It has been insufficiently robust and well-designed to resolve the country’s conflicts but far too heavy-handed and frequent to allow the country to resolve its own problems. An entire generation of Somalis now views the “state,” whether it is the Transitional Federal Government or al-Shabab, as a largely predatory institution to be feared, not as a source of stability. Perhaps more than anything, the spending on Somalia demonstrates how the world — and Washington in particular — keeps groping for quick tactical fixes while failing to embrace the sensible diplomacy and the kinds of patient engagement that might help Somalia achieve peace.
Humanitarian and development aid: $13 billion
Somalia’s tilt into chaos has been first and foremost an enormous human tragedy. According to the United Nations High Commissioner for Refugees and relief agency data, between 450,000 and 1.5 million Somalis have died due to the turmoil since 1991, more than 800,000 have fled as refugees, and another 1.5 million are internally displaced. One in four Somalis is either displaced or a refugee. Humanitarian aid has thus constituted a sizable chunk of spending on Somalia, and this figure is sure to grow sharply given the horrifying famine now under way; the United States alone has offered up $500 million to stem the tide of starvation in the Horn of Africa this year, and the United Nations estimates that a worldwide contribution of at least $2 billion will be needed to address the situation in the horn this year alone.
But although $13 billion is a lot of money, aid experts note that Somali refugees and internally displaced persons receive far less aid per capita than their counterparts elsewhere in the world. The average annual cost of assisting a single refugee from Somalia is just over $300, and the average Somali internally displaced probably receives half that amount in aid, according to estimates prepared by Mercy Corps International for our report. The amount of aid reaching those displaced within southern Somalia remains strikingly low, in part because insecurity, al-Shabab obstructionism, and U.S. terrorism restrictions have made access to these populations incredibly difficult.
Peacekeeping, military responses, military aid, counterterrorism, and diplomacy: $7.3 billion
The international community has tried just about every trick in the book to contain and mitigate Somalia’s instability, ranging from peacekeeping to military aid, counterterrorism efforts, and even Predator drone attacks. The initial U.S.-led international military intervention in Somalia in December 1992 began as an effort to protect food aid shipments from looters, only to quickly morph into an ill-conceived effort to oust the powerful warlord Mohamed Farrah Aidid. After the “Black Hawk Down” incident in 1993 that brought a sudden and tragic end to the last U.S.-led intervention, the United States has largely exerted force through proxies, including Ethiopia, Uganda, and Burundi. African Union peacekeepers have made some progress in recent months as al-Shabab has retreated from Mogadishu. But it’s clear that Somalia’s Transitional Federal Government would collapse without this outside support.
Spending on arms transfers and military approaches has dwarfed the resources invested in diplomacy or institution-building. Indeed, our research indicated that only about $42 million was spent on extraordinary diplomacy — i.e. not including embassy staffing and other normal costs — related to Somalia, most of it on crisis monitoring and a series of poorly planned peace conferences. This is a shame because heavy diplomatic spadework is precisely what is needed to help Somalia’s clans reconcile and establish a functioning central government. The Transitional Federal Government, which countries including the United States continue to strongly back, remains incredibly corrupt and broadly unrepresentative.
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Piracy: $22 billion
The rise of Somali piracy is a fairly recent phenomenon, and an incredibly expensive one. Somali pirates attacked over 154 ships in the first half of 2011 alone, almost 50 percent more attacks than in all of 2008. The average ransom paid per released ship in 2010 was $5.4 million. But ransom costs are only part of the story, with insurance rates, rerouting, international naval deployments, and added security measures all adding to the bill.
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International criminal investigations: $2 billion
Somalia’s lawlessness has made it an attractive base of operations not only for terrorist organizations and arms traffickers but for a range of other illegal activities as well, including drug trafficking. Costs in these areas are particularly challenging to track with a high degree of accuracy, but drug interdiction efforts, illicit financial flows, and sprawling law enforcement investigations into everything from smuggling to terrorism have added another $2 billion to spending over the last two decades.
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Remittances: $11.2 billion
Somalia, like much of the developing world, is incredibly dependent on remittances, money earned by Somalis living and working abroad and sent to relatives in the country. As one aid agency has observed, remittances in Somalia “often make the difference between whether a family survives or not.” Even counting only the portion of remittances that have likely gone toward lifesaving aid for Somali families and friends, the total still comes to $11.2 billion.
This incredible level of support from expatriate Somalis does much to explain the country’s resiliency despite repeated calamities and long periods of relative neglect by the international community; indeed, for all the money the world has poured into Somalia, the World Bank argues that “the major inflow of ‘aid’ has come from Somalis themselves.”
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